Strong holiday shopping and the growing use of cryptocurrencies propelled PayPal Holdings (NASDAQ:PYPL) to a strong finish in 2020.
The company added a record 72.7 million active accounts in 2020, more than it had forecast, with the addition of 16 million accounts in the fourth quarter alone. That helped overall revenue climb 23% to $6.12 billion U.S. during the quarter, topping analysts’ estimates.
PayPal said consumers flocked to its service in the final months of the year as they hurried to finish their holiday shopping and started using the company’s wallets to buy and sell cryptocurrencies.
PayPal was one of last year’s big winners, with many consumers turning to the company’s services for online shopping while sheltering in place during the COVID-19 pandemic. PayPal said total payments on its network climbed 39% to $277 billion U.S. in the final three months of the year, more than the $267 billion U.S. forecast by analysts.
Venmo, the company’s popular person-to-person service, processed $47 billion U.S. in payments, up 60% from a year earlier and more the $45 billion U.S. analysts expected. PayPal’s share price was up 5% in pre-market trading Thursday following the earnings report.
The company said activity on its network remains high after it added the ability for consumers to buy, hold and sell cryptocurrency using its wallets in recent months. Customers who took advantage of the feature to purchase cryptocurrency began logging into PayPal at two times the rate they were prior to using the service, the company said.
Looking forward, PayPal said revenue in the first three months of the year is set to climb 28%, more than the 22% analysts have been forecasting. Adjusted profits are likely to climb 50% in the first quarter.
Still, the company warned that growth could begin to slow in the coming year. Total payments volume will likely climb by a percentage in the high 20s, compared with 31% growth in 2020. Revenue for the year is likely to increase 19%, and the company expects to add 50 million more active accounts.
